ICANN Senior Vice President Kurt Pritz has responded (pdf) to a written question and expanded on his answers to questioning from U.S. representatives during a hearing about new TLDs on May 4.

Representative Howard Coble submitted a written question asking if ICANN was going to make special arrangements for “brand” top level domain names should a brand owner decide to wind down operation of the new top level domain name.

At the time of the hearing there was no such provision, and the .brand TLD could have been run by another entity. Since then, and perhaps in response to Coble’s question, a provision has been added to eliminate this problem and allow .brand owners to close their TLDs.

Pritz also provided more detailed answers to questions including:

-Why new gTLDs should be introduced
-If there will be a globally protected marks list (the community doesn’t want it)
-If anyone at ICANN has a financial incentive to approve the program by June (no, just meeting deadlines to prepare the board for its decision)
-If there are any safeguards against introducing new TLDs that are racial epithets (there’s a process)

I predict new TLD marketing will start after ICANN’s Singapore meeting this month.

Just about everyone — including me — is horrible at predicting what ICANN will do and when it will do it regarding new top level domain names. The only people who’ve been right are those that said “it’s not going to happen at this meeting”.

That said, I’m going to take another crack at it. Here’s what I predict for this month’s ICANN meeting in Singapore:

ICANN will not have resolved all its differences with GAC. That means it won’t approve a final guidebook.

Instead, as it has hinted, it will approve “the new gTLD program” and consider the applicant guidebook a work in progress.

This half-ass, middle ground “hedge” will allow ICANN to throw the party Peter Dengate Thrush so desperately wants to have in Singapore for new TLDs. But the mood will be somewhat somber. After all, the party celebrates a finish line that wasn’t crossed.

But the big win here will be that this will give ICANN a rationale to start the communications period for new top level domain names. This communications period (really a marketing campaign) is supposed to run for four months prior to new top level domain name applications being accepted.

New TLD proponents have asked if it could run concurrently with guidebook negotiations. In the past they’ve been shot down. But since it’s clear the guidebook will not be a “finished product” perhaps until the first application is accepted, ICANN will now decide it’s OK to start the marketing.

In fact, the May 30 draft of the communications plans states that it won’t start until there is “board approval of the new gTLD program”. (Elsewhere in the document it says it won’t start until the guidebook is approved, but let’s not split hairs.)

So the board will generally approve the program (whatever that means) in Singapore this month and kick of the marketing.

But ICANN and the Governmental Advisory Committee (GAC) just released a joint statement about another “productive meeting” between the two of them. The statement concludes:

The latest discussion and ICANN Board and GAC agreement on the benefits of having a face-to-face meeting in Singapore pave the way to possible Board consideration of program approval on 20 June 2011.

If the program is approved on June 20, I can guarantee you that ICANN will make significant concessions to the GAC between now and then. Those concessions will mostly be in favor of trademark interests.

After what seemed like disappointing news last week, now things are looking up for potential new top level domain name applicants.

ICANN just released resolutions from its board meeting on January 25 and they indicate that ICANN plans to go forward with approving the applicant guidebook during the March meeting in San Francisco. The group plans to “trigger the Bylaws mandated consultation” with the Governmental Advisory Committee during the March meeting before the Friday board meeting.

That means we may see the application window for new TLDs open up in late summer and the first ones would likely to come online in 2012.

But this is a case where new TLD supporters surely won’t count their chickens before they hatch. They’ve already done a lot of counting to no avail.

ICANN’s board dropped a bombshell in November when it said there would be no restrictions on registrars owning registries for new top level domains. Observers questioned how exactly this would work for existing registries such as VeriSign, which runs .com and .net.

In the letter, Pritz points out specific language in the board’s resolution:

ICANN will permit existing registry operators to transition to the new form of registry agreement, except that additional conditions may be necessary and appropriate to address particular circumstances of established registries.

Pritz then tries to clarify what this means for Neustar, which runs .biz:

…if and when ICANN launches the new gTLD program, Neustar will be entitled to serve as both a registry and registrar for new gTLDs subject to any conditions that may be necessary and appropriate to address the particular circumstances of the existing .BIZ registry agreement…

So it’s clear that existing registries will be able to own registrars and offer new gTLDs. But what about existing TLDs? Would a registrar owned by Neustar be able to sell .biz?

The bigger question would be restrictions on VeriSign and .com. If VeriSign buys a registrar, you can expect serious focus from anti-trust authorities.

Demand Media has asked ICANN to reconsider an anti-cybersquatting provision in the new top-level domain Applicant Guidebook that may ban the company from running a TLD.

ICANN will do background checks on the companies applying for TLDs and their officers. If they are found to have lost three UDRP decisions in the last four years, their applications will be rejected.

Demand Media, which owns eNom, calls this “draconian”, saying that three UDRP losses can hardly be considered a “pattern” of cybersquatting when a company owns thousands of domains.

As DNW reported last month, a Demand Media subsidiary has six UDRP losses to its name just this year, although the ICANN guidebook may contain enough loopholes to let the company bid anyway.

Demand said the three-strikes rule is “an extremely broad standard that we believe will unintentionally disqualify otherwise qualified applicants”.

It went on to say that such a rule was never envisioned by the UDRP, and that some respondents may have chosen to fight complaints more fiercely had they known the full consequences.

Using UDRP decisions as an additional ex post facto punishment to disqualify an otherwise qualified applicant is an inappropriate and draconian penalty. The result is a retroactive change in the legal consequences of all UDRP decisions.

Demand Media’s position is backed up by the Internet Commerce Association, which represents big-volume domain investors.

But the rules are supported by ICANN’s intellectual property stakeholders, which have been fighting for stronger IP protections in the new TLD program for years and seem to be getting their way.

In about 24 hours the ICANN Board of Directors will kick off a retreat. It’s not an official board meeting, but it’s anticipated that the two day retreat will finalize an important issue: registry/registrar separation.

A lot is at stake in this decision. Millions of dollars for the stakeholders.

Until now a registry hasn’t been able to own a registrar and (technically) vice-versa. Afilias is owned by a number of registrars, though.

The question is if this separation should be relaxed.

In one corner are the registrars that would like to introduce new top level domain names. Ideally they would like to be unencumbered. But some of them, including eNom, are willing to go the middle road. The middle ground proposal is dubbed JN2. It basically says a registrar can be a registry but with heavy restrictions until 18 months after the TLD is released.

In the other corner are those that want no integration. They want to limit cross ownership to 2%. In Afilias’ case, it wants to increase cross ownership to 15% because of its existing registrar investors.

You can read about the various proposals and how no consensus has been reached here.

Another issue is private registrars. Should someone who owns a registrar solely to manage their own domains be restricted from releasing a new TLD? That would defeat the purpose of this restriction.

The pressure is on ICANN’s board. Like any good bureaucratic and political organization, odds are they’ll pick the middle of the road. Or punt to someone else.

Advocacy groups will have open season on new top level domain name applications.

On page 1-6 of the fourth draft applicant guidebook for new top level domain names, ICANN has moved its language regarding a comment periods. I hadn’t really paid attention to it before. Essentially, once applications for new top level domains (such as .sport or .nyc) are posted, anyone will be able to submit a comment that will be considered by the application evaluation team:

In the new gTLD application process, all applicants should be aware that public comment fora are a mechanism for the public to bring relevant information and issues to the attention of those charged with handling new gTLD applications. Anyone may submit a comment in a public comment forum.

As we saw with the recent comment period on .xxx, this could create a lot of “form letter” submissions. I expect these form letter submissions to be organized against particular types of domain names (adult and religious come to mind). If someone applies for .sex, you can bet that Focus on the Family and American Family Association will organize its troops. If .god is proposed, a whole host of groups will come out in opposition. Practically speaking the comments will carry little weight on such applications, though.

The number of half-automated submissions could overwhelm ICANN’s systems. Perhaps it’s time to upgrade the comment system: require registration or filter out duplicate content submissions.

Electronics company Canon has announced plans to apply for the .canon top level domain name, when such domain names become available. In a press release, Canon states:

With the adoption of the new gTLD system, which enables the direct utilization of the Canon brand, Canon hopes to globally integrate open communication policies that are intuitive and easier to remember compared with existing domain names such as “canon.com.” Canon has made the official decision to begin necessary procedures to acquire “.canon” upon the introduction of the new system. Following approval for the new gTLD system, which is expected to take place after the latter half of 2011, Canon will make full use of the new domain name to increase the convenience and effectiveness of its online communications.

Most companies have not publicly announced plans to operate a brand top level domain name. However, some companies have shown an interest, if not to at least have the right to get their .brand. For example, Hewlett-Packard has complained about not being able to get .hp since it doesn’t meet the three character requirement.

What will be really interesting is when a company that has been fighting new TLDs on trademark cost grounds decides to throw its hat in the ring. With the EOI process nixed, we might not see this until the application period opens.

A lot of the talk around new top level domain names is the lack of pricing controls on providers. A company that launches a new TLD can set prices however they wish, and owners of existing TLDs worry that this idea would then be applied to their domains. Have a successful domain? You could get hit with a $1,000 renewal bill.

But let’s look at the other side for a moment. My guess is VeriSign would like to offer variable pricing — on the downward side. There are literally millions of .com domain names that could earn pay-per-click revenue each year, but not enough to cover the $6.86 (plus 18 cent ICANN fee) to justify registering the domain name. As a result, instead of getting at least some of the value, VeriSign gets $0 from these unregistered domains.

What if VeriSign could offer some of these domains for less than $6.86 (or $7.34 starting in July)? It could capture the value from these millions of domains, even if it’s not the full amount. If a domain makes $4 a year, it could sell the registration for $2. It could even work out a revenue share deal with registrars.

Think this is crazy? Well, one domain name registrar (that has its sights on the registry market) has received a patent on this idea. Demand Media, owner of eNom, got a patent last year for such a system.

In Demand Media’s model, there would be multiple tiers of registration. So if I’m paying $2 for a low tier registration, and someone comes along willing to pay full price, they could get the domain. But in the mean time, the registry is earning $2 and I’m earning $2+ in pay-per-click.

Of course, the politics of this may make it difficult for VeriSign to pull this off. If they can offer one type of .com domain for $2, couldn’t they offer all domains for that price? More likely would be “volume” deals with certain registrars, as most registries offer today. Or perhaps another variation on this model would be less controversial.